Justin Perry's Mortgage Blog

Demand for prime and fixed-rate mortgages increased during the second half of 2007, according to a report released today by the Mortgage Bankers Association.

Fixed-rate loans accounted for 63.6 percent of all first mortgages in the last six months of 2007, compared to just 53.4 percent during the first half of the year.

And 79 percent of all origination dollars were for prime loans, up from 70 percent in the first half of 2007, while 7.5 percent were non-prime (10.4 percent in 1st half) and 7.8 percent were Alt-A (15.8 percent in 1st half).

The MBA attributed the increased popularity of fixed-rate mortgages to a significant decline in long term interest rates, a tighter spread between ARM and fixed rates, and the slowing of subprime lending, which is often accompanied with an adjustable-rate.

Government-insured FHA and VA loans also saw an increase in market share, accounting for 5.7 percent of all origination dollars, up from 3.8 percent six months earlier.

This really should come as no surprise to anyone.  Personally the only number that stands out to me is the percentage of FHA and VA loans originated in that period.   FHA and VA loans account for nearly 20% of the loans we do here at First Call Mortgage Company of New England.  I just hope that the almost 20% of people who did not receive prime loans were at least offered an FHA or a VA loan.  

A Texas couple recently filed a lawsuit against EMC Mortgage Company for clearing out their house of all belongings, including family heirlooms and food that was in the pantry, while they were away. 

When the family returned home they immediately thought they had been robbed.

The family had purchased the home while it was going into foreclosure back in May of 2008.  It appears that the foreclosure process was never stopped. 

EMC Mortgage Corp was the mortgage holder on the property from the previous owner.  They hired a local company to go and seize all personal property in the house.  They also drilled out locks during the process.  The seized belongings were said to be given to local thrift stores but the family has not had any luck finding them.  They are now suing for the lost property plus compensatory damages.

The bank could not be reached by phone by the attorneys on both sides have been talking and they are now trying to determine whether the bank ordered just the locks to be drilled and if possibly the family's property was removed illegally on behalf of the company asked to drill the locks. 

This story was published in the area's local news.

Inflation fears have driven mortgage rates to levels not seen since October 25th, 2007.  One of the biggest contributors was comments made by Fed Chairman Ben Bernanke about the rising fear of inflation.  This left many economists to believe that the Fed will be increasing rates in upcoming meetings. 

The following are average mortgage rates published by Freddie Mac.  Keep in mind all these interest rates come with points so they will appear lower than what you can actually get without paying points for a home loan.   

Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.32% with an average of 0.7 point in the week ending Thursday, up from 6.09% last week. Last year at this time, the 30-year loan averaged 6.74%.

The 15-year fixed-rate mortgage this week averaged 5.93% with an average 0.6 point, up from last week when it averaged 5.65%. A year ago at this time, the 15-year fixed rate mortgage averaged 6.43%.

The last time the 15-year fixed-rate mortgage was higher was the week ended Oct. 25, when it averaged 5.99%.

Five-year adjustable-rate mortgages (ARMs) averaged 5.70% this week, with an average 0.7 point, up from last week when it averaged 5.51%. A year ago, the 5-year ARM averaged 6.37%.

One-year ARMs averaged 5.09% this week with an average 0.6 point, up from last week when it was 5.06%. At this time last year, the 1-year ARM averaged 5.75%.

If you are looking for some positive news here is some info released by the National Association of Realtors.  They say the number of homes under contract rose 6.3% in April which is due mostly to buyers looking for bargains. 

All throughout New England mortgage rates continue to climb.  Today we are about half a point (.5) higher across the board than we were just one week ago.  This may seem contradictory to all the news as of late, with the Fed cutting interest rates and real estate being stagnant.  But there are more important factors that drive the supply and demand for mortgages.

I have mentioned this to my readers many times but bad economic news is generally good for mortgage rates and on the flip side, news that is better than expected can drive mortgage rates up. The data from recent economic reports has come in better than expected.  One of the biggest pieces of information was related to jobs.  The ADP report showed that the ecomony is actually adding jobs whereas many forecasted a declining jobs report.  Remember, a stronger than expected economy builds faith in the stock market and other growth dependent investments.  So as traders move their money out of the securities that back mortgages (MBS - mortgage backed securities), those who hold them must lower their price in order to sell.  A lower price on these MBS creates higher mortgage rates. 

If you are considering refinancing your current loan I would recommend locking your interest rate today.  

Mortgage rates are up and mortgage applications are down.   It is becoming increasingly difficult to get approved for a mortgage loan which makes it hard to buy a house or refinance your current mortgage.  Just when I think I have seen it all I find a column like this one from http://www.thetruthaboutmortgage.com/. 

This is getting ridiculous, but according to the Wall St Journal, former Star Search host and sweepstakes presenter Ed McMahon is facing foreclosure.

Per the Journal, McMahon’s Beverly Hills, CA mansion, which is currently listed at $5.75 million, was $644,000 in arrears on a $4.8 million loan as of February 28 when none other than Countrywide filed a notice of default.

McMahon also has a home equity line of credit of $300,000 tied to the residence, although that may have been frozen long ago when Countrywide began limiting borrower’s ability to draw against their faltering property values.

Real estate agent Alex Davis told the WSJ that the property has been on the market for roughly two years, and has yet to attract any buyers despite a price reduction.

According to Davis, McMahon fell behind on his mortgage payments after breaking his neck in a fall 18 months ago, obviously keeping him away from any possible projects.

I found the listing of the home online here, where it is described as a Mediterranean-style celebrity estate in a gated community off Mulholland Drive called The Summit.

According to Wikipedia, McMahon apparently owned real estate worth more than $200 million during the 1990s, largely in Malibu, CA.

While startling, McMahon isn’t the first celebrity to face foreclosure, with the likes of Jose Canseco, Michael Jackson, Marion Jones, and Latrell Sprewell all finding themselves in similar circumstances.

Stay tuned for a bad reality show in which a celebrity attempts to sell their home after receiving a foreclosure notice.